Companies that dont have sustainability as part of their core value proposition need to act now to protect against future reputational impacts and loss of market share, said Shikha Jain, author of the study and Partner at Simon-Kucher & Partners. While attitudes vary across generations, countries, and industries, 85% of consumers have become greener in their purchasing in recent years. As companies look to break into new markets, they must understand that each market demands its own approach. Products that had a sustainability claim on-pack accounted for 16.6% of the market in 2018, up from 14.3% in 2013, and delivered nearly $114 billion in sales, up 29% from 2013. Globally, willingness to pay for sustainable products or services is highest in US (42 percent), with these the US also representing the highest average premium (37 percent premium). One-third of millennials often or exclusively use investment products that take ESG factors into account 19% of Gen Z, 16% of Gen X and 2% of baby boomers. For years, researchers have examined climate-oriented consumption to see if it actually wins consumer support. Inherently skeptical, Millennials will punish companies on social media not deemed to be fully transparent as well as those that pay lip service to CSR and causes important to them. Businesses that under-appreciate the need for CSR do so at their peril. While the survey respondents were answering questions . Nielsen's most recent Global Sustainability Report found that 66 percent of consumers said they were willing to pay more for sustainable brands, up from 55 percent in 2014. . While the demand for such products remains low, the price remains high. They wanted to know more about what influences how people feel about brands, and how those feelings impact buying behavior. A 2015 global online survey by Nielsen reflected Brabeck-Letmathe's comments, with research showing that 66 percent of the 30,000-plus respondents said they would be willing to pay extra for . Consumersparticularly Millennialsincreasingly say they want brands that embrace purpose and sustainability. Queensland University of Technology apporte un financement en tant que membre adhrent de TheConversation AU. To ensure the most secure and best overall experience on our website, we recommend the latest versions of. I can attest to the fact that sustainability isn't just something I "sorta kinda" consider--it's one of the primary reasons I either buy or don't buy from consumer brands. The Consumer Sustainability Survey (2019) found that 72% of consumers buy more environmentally-friendly products than five years ago. So it appears that some categories that are behind in sustainability-marketed product share are making up for lost time. Since then, the trend has only increased: a 2015 Nielsen poll showed that 66% of global consumers are willing to pay more for environmentally sustainable products. 75% of Millennials are willing to pay more for an environmentally sustainable product, compared to 63% of Gen Z, 64% of Gen X, and 57% of Boomers. Vietnamese consumers are the most socially-conscious among Southeast Asians, with 86 percent expressing their willingness to pay extra for products and services from firms which are committed to positive social and environmental impact, a new Nielsen survey found. Consumers' demand for sustainable products is increasing. Numberingmore than 80 millionstrong, Millennials already account for an estimated$1 trillionof U.S. current consumer spending. To use individual functions (e.g., mark statistics as favourites, set They expect a two-way, open dialogue with companies and their brands. "Share of consumers who were willing to pay more for sustainable goods in China as of November 2022, by category." For this reason, the demand for sustainable foods is growing in the market. Ryan Rudomineris a principal at R2 Strategic Consulting where he specializes in strategic communications, advocacy, and media relations. Says Gstalder: While marketing good deeds is encouraged and expected by consumers, authenticity and credibility are essential. Consumers are also willing to pay more for chocolate products that are free-from 'undesirable' or artificial ingredients, a subset of products that makes up 15.2% of the overall chocolate category . As consumers become increasingly aware of what they put in and on their bodies, theyre also interested in buyingand sometimes paying morefor products that simultaneously help the environment. New York-based Nielsen forecasts the market to reach somewhere between $142.4 billion and $150.1 billion by 2021. Speaking with: law professor Cass Sunstein, on why behavioural science is always nudging us. Sustainability sentiment is particularly consistent across income levels. All these terms are used in labelling to make us feel good if we buy products claimed to minimise harm to the planet and the environment. While 66 percent of global consumers are willing to pay. not how pretty the blush is. This is especially true for Millennials. For instance, while the overall shampoo category saw declines of 3.4% over a year long period ending April 2018, natural shampoos, which own 11.2% of the value share, are steadily growing at 2.2%. Many sustainable trends in new markets start with beauty and personal care. In more than 90% of consumer packaged goods categories, sustainability-marketed products grew faster than their conventional counterparts. Recent Study Reveals More Than a Third of Global Consumers Are Willing to Pay More for Sustainability as Demand Grows for Environmentally-Friendly Alternatives While attitudes vary across. Consumers care about sustainabilityand back it up with their wallets, Five Ws and one H to mastering your category, Consumer Outlook 2023: The unsettled state of global consumers, Communication led by service advisors helps drive satisfaction with aftersales process in India, Do not sell or share my personal information. In burgeoning sustainability markets, however, natural and organic are paving the way for more detailed and specific claims. Meanwhile, fish and seafood dollars and units rose 8.7% and 2.7%, respectively, from 2017 to 2019, outpacing the growth of other proteins, including legumes, nuts and seeds. Consumer concern about the environment does not readily translate into the purchase of environmentally friendly products. So while not all consumers will pay more for green climate-friendly products despite the best of intentions, we can slowly nudge them to make better choices for the planet. 43% of consumers want brands to be more aggressive about showing sustainable products on-site to further personalize their shopping experience. A balanced approach is key for brand communicators, with the emphasis on demonstrating good deeds versus self-serving promotion.. For years, brand managers have groused that consumers say they intend to buy sustainable products but dont actually buy them. Given the evidence that consumer tastes are changing, an attitude of Why mess with a recipe that has worked well over the last 40 years? is the wrong one to take. According to market research firm Nielsen, just 22% of the world's consumers were willing to pay more for an eco-friendly product in 2011, despite the fact 83% thought it was important. The first-ever edition of the companys Business of Sustainability Index found that nearly two-thirds (64%) of Americans are willing to pay more for sustainable products but most (74%) dont know how to identify them. 9. We made no attempt to assess if products marketed as sustainable were, in fact, sustainable. Companies that are able to navigate the business of sustainability will be best positioned for future success.. The Nielsen Global Survey of Corporate Social Responsibility and Sustainability was conducted between Feb. 23-March 13, 2015, and polled more than 30,000 consumers in 60 countries throughout Asia-Pacific, Europe, Latin America, the Middle East, Africa, and North America. But nearly 60% are unwilling to pay more money for that eco-friendly product. For the US, 22 percent of consumers indicate major changes to the behavior, but that number jumps to 55 percent when including those who say theyve at least made some modest changes. And how can we encourage people to make good choices? To a certain degree, products that need to have a higher degree of efficacy (such as laundry care and sanitary napkins) were more likely to have a lower share of sustainability-marketed products, perhaps because consumers are concerned about performance trade-offs. 66% of survey respondents are willing to pay more for sustainable goods, up from 55% in 2014, and 50% in 2013 Sales of consumer goods from brands with a demonstrated commitment to sustainability have grown more than 4% globally, while those without grew less than 1%. This statistic reveals a significant shift in consumer behavior and highlights the importance of sustainability in marketing to this eco-conscious generation. 2015 Nielsen Global Corporate Sustainability Report, 2015 Cone Communications Millennial CSR Study. More than half of Europeans (51%) said they are willing to pay more for climate friendly food. The study surveyed 10,281 consumers across 17 countries: USA (N=1,062), Germany (N=1,022), Denmark (N=771), Sweden (N=757), Brazil (N=539), China (N=516), Japan (N=516), Spain (N=515), Switzerland (N=514), UK (N=513), Australia (N=510), Austria (N=510), France (N=510), the Netherlands (N=510), Norway (N=506), Italy (N=506), UAE (N=504), including representative quotas set for age, gender, living area, education level, employment status & income level. As US psychologist Icek Ajzen wrote: Actions, then, are controlled by intentions, but not all intentions are carried out . Professor of Marketing and Consumer Behaviour, Queensland University of Technology. We examined over 36 categories and more than 71,000 SKUs, which accounted for 40% of CPG dollar sales over the five-year period. But research continues to show few consumers who report positive attitudes toward eco-friendly products actually follow through with their wallets. We are interested in estimating the proportion of all consumers willing to pay more. Marketers, operators, and merchants need to take the following steps: one, penetrate the right segment; two, unlock what motivates that segment to spend money; and three, act on strategies that build loyalty through ongoing consumer engagement. On Earth Day 2020, the organisation Climate Neutral an independent non-profit organisation working to decrease global carbon emissions confirmed 103 brands had completed its certification process in 2020 and 50 other brands were still in the process. "Despite the fact that Millennials are coming of age in one of the most difficult economic climates in the past 100 years, they continue to be most willing to pay extra for sustainable offerings--almost three-out-of-four respondents," says Nielsen. More than half (56%) of Americans would use a credit card that could calculate and offset the environmental footprint of products purchased. For years, brand managers have groused that while consumers say they intend to buy sustainable products, in store they dont actually purchase them. Indeed, one recent report revealed that certain categories of products with . Nielsen, an S&P 500 company, has operations in over 100 countries that cover more than 90% of the worlds population. Simple economies of scale also impact on price. They found that: 61% of consumers would be willing to pay more for eco-friendly DIY products. For more details, review our .chakra .wef-12jlgmc{-webkit-transition:all 0.15s ease-out;transition:all 0.15s ease-out;cursor:pointer;-webkit-text-decoration:none;text-decoration:none;outline:none;color:inherit;font-weight:700;}.chakra .wef-12jlgmc:hover,.chakra .wef-12jlgmc[data-hover]{-webkit-text-decoration:underline;text-decoration:underline;}.chakra .wef-12jlgmc:focus,.chakra .wef-12jlgmc[data-focus]{box-shadow:0 0 0 3px rgba(168,203,251,0.5);}privacy policy. Businesses must adapt to the times as consumers . Climate-friendly defines products that reduce damage specifically to the climate. GreenPrint is a global environmental technology company, offering sustainability as a service with patent-protected programs that deliver environmental impact and bottom-line results. Overall, consumers identified . In more than 90% of the CPG categories, sustainability-marketed products grew faster than their conventional counterparts. And according to Nielsen, I'm not alone in that. This sum will continue to grow exponentially as more Millennials reach peak buying power. Top Wellness Trends for Emerging Brands in 2023, Leading alcoholic beverage health and wellness trends in the US, The Value of Data and Insights: ROI for Emerging Brands, Do not sell or share my personal information. Retail data backs up the importance of these influencers. Prosek Partners Studies show that people are geared towards using sustainable products more than others. For further information please contact: According to a June 2014 Nielsen study , 55% of global online consumers "are willing to pay more for products and services from companies that are committed to positive social and environmental impact." In fact, as early as 1992, the European Commission established the EU Ecolabel , a Europe-wide voluntary environmental labeling scheme that . Please do not hesitate to contact me. [email protected] Get full access to all features within our Business Solutions. Complete study findings are available upon request, including country splits. Using multiple communication methods is important to demonstrate good deeds, such as third-party validation (news coverage), annual reports, affiliation with a respected non-profit or civic organization, employee volunteerism, advertising, or reporting actual work in the community on a web site. In fact, almost half (41%) of consumers from around the world say that theyre highly willing to pay more for products that contain all-natural or organic ingredients. But in a increasingly interconnected world, it's starting to be normal to think critically about where things come from and whether the company you're supporting is a responsible corporate citizen. The top attributes that more than one-third of consumers were willing to pay more for included: cruelty free (31%), farm raised (32%), organic farming (33%) and environmentally friendly (33.5%). Or to remain unmoved by those facing increasingly poor living conditions across the globe. Shoppers once selected grocery products based simply on price or brand, but now attributes such as climate-friendly or eco-friendly are part of the consideration. 6 takeaways from the worlds biggest cultural policy gathering, Putting Solar Panels On Farms Makes Sheep Happier. This page does not exist in [x], feel free to read the page you are currently on or go to the [x] homepage. Surface Studio vs iMac - Which Should You Pick? Consumer-goods brands that fail to take this into account will likely fall behind.. NYU Sterns Center for Sustainable Business just completed extensive research into U.S. consumers actual purchasing of consumer packaged goods (CPG), using data contributed by IRI, and found that 50% of CPG growth from 2013 to 2018 came from sustainability-marketed products. This shows that sustainability has been on consumers' minds for quite. The hierarchy among drivers of consumer loyalty and brand performance is changing, says Farraj. Most important, products marketed as sustainable grew 5.6 times faster than those that were not. Our analysis looked at products on-pack communication about their sustainability. Accessed March 02, 2023. https://www.statista.com/statistics/1367681/china-consumers-willingness-to-pay-more-for-sustainable-goods/, Deloitte. 65% would be willing to spend up to 20% more on eco-friendly products. There are several reasons for this. Millennials and Gen Z are becoming a force to be reckoned with as they continue to represent a larger share of the consumer demographic. Simon-Kucher & Partners, Strategy & Marketing Consultants: Simon-Kucher & Partners is a global consulting firm specializing in TopLine Power. : (617) 231-4551 A substantial portion of consumers are currently willing to pay for sustainability, demonstrating that there is a market for mission-driven green companies and why we see a rise in sustainable companies around the world. Defending and preserving our planet is not only the right thing to do, its good business. Nielsen's 2014 Global Survey on Corporate Social Responsibility, released Tuesday, shows that 55 percent of global online consumers across 60 countries are willing to pay more for products and services from companies that are committed to positive social and environmental impact. The report, "Doing Well by Doing Good," found that most consumers are willing to pay more money for good and services that are sustainable. Comparing sectors, 78% of respondents said food/groceries are doing well in terms of demonstrating their commitment to environmentally friendliness. While companies are increasingly using environmental claims to appeal to consumers, they also attract greater scrutiny. "Consumers are really seeking to purchase products that help them stay true to their values and what they consider matters most to them," said Parker. The Global Sustainability Study 2021*, conducted by global strategy and pricing consultancy Simon-Kucher & Partners, reveals significant global paradigm shifts in how consumers view sustainability and the associated generational differences in willingness to pay for sustainable products and services. The rise in the percentage of respondents under 20, also known as Generation Z, who are willing to pay more was equally strongfrom 55% of total respondents in 2014 to 72% in 2015. 470-788-0718 Tech is close behind at 74%, while gas stations and convenience stores rank lower at 51% and 54% respectively. Younger shoppers are the most willing to. We help our clients achieve growth and profit targets by applying practical, evidence-based strategies. For additional market-level insights, read or Unpacking the Sustainability Landscape report. (January 18, 2023). Consumers have some understanding of what makes a product sustainable but it is not necessarily a consideration when making a purchase Although the majority of consumers recognise what makes a product sustainable i.e. Hence, despite environmental concern and the positive attitude of customers towards sustainability and green products, its estimated the market share of green products will reach only 25% of store sales by 2021. A paid subscription is required for full access. Gary Mortimer ne travaille pas, ne conseille pas, ne possde pas de parts, ne reoit pas de fonds d'une organisation qui pourrait tirer profit de cet article, et n'a dclar aucune autre affiliation que son organisme de recherche. In 1989, 67% of American consumers stated that they were willing to pay 5 - 10% more for sustainable products. A fresh one is out from McKinsey & Company and Nielsen IQ - and the punchline is that making and In other words, I'm willing to spend more (a lot more, in fact) to know that what I'm spending my money on is actually good for the earth and the people on it. We used clothing brand Reformation as a case study of sorts and spoke with experts in consumer behavior and the fashion industry to better understand the sustainability movement, why consumers love it, and how more brands can do their part. World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use. In fact, almost half (41%) of consumers from around the world say that they're highly willing to pay more for products that contain all-natural or organic ingredients. In 2015, Nielsen polled 30,000 consumers in 60 countries around the world. But nearly 60% are unwilling to pay more money for that eco-friendly product.. Consumers expect more than ever from the brands they buy and increasingly are rewarding companies whose services and products are both good for them and good for society. Consumers across regions, income levels, and categories are willing to pay more, if doing so ensures they remain loyal to their values. Can changing your mindset change everything? [email protected], Internet Explorer presents a security risk. Among the 66% of global respondents willing to pay more, over 50% of them are influenced by key sustainability factors, such as a product being made from fresh, natural and/or organic ingredients (69%), a company being environmentally friendly (58%), and company being known for its commitment to social value (56%); sales and coupons didnt even make the top five. Reports, such as Nielsen Insights , suggest the majority (73 percent) of people would change their consumption habits to reduce their impact on the environment, and almost half . The best of the best: the portal for top lists & rankings: Strategy and business building for the data-driven economy: Industry-specific and extensively researched technical data (partially from exclusive partnerships). Interestingly, of the people that are willing to pay a sustainability premium, the premium amount is lowest for Consumer goods (22 percent premium on average) it is highest for Financial services (27 percent premium on average). We assessed third-party certification, such as USDA organic and Fair Trade, and the packagings claims about undesirable traits (such as genetically modified, BPA, parabens, antibiotics, growth hormones) and positive characteristics (local, grass-fed, compostable, animal crueltyfree). Please create an employee account to be able to mark statistics as favorites. Corporate leadership should no longer give brand managers a pass when they claim that there is no demand for sustainable products. Mr. Davis said of the survey: Companies must build trust and loyalty by clearly demonstrating that they share environmental goals with their customers. In a free market economy, it is very difficult to force people to pay more for products. Image:Caleb Jones/Unsplash. Conveying CSR efforts to Millennials requires authenticity, and a unique approach as Millennials grew up with the Internet and want their voices heard. For fifteen years, Rudominer has operated on the front lines and behind the scenes of numerous communications campaigns, providing strategic counsel to public officials, corporations, trade associations, and non-profits. This page does not exist in [x], feel free to read the page you are currently on or go to the [x] homepage. This desire for sustainable products among Gen Z is robust. Question: Socially conscious Consumers In March 2015, a Nielsen global online survey "found that consumers are increasingly willing to pay more for socially responsible products. What is the Green List and how can it help protect the worlds natural wonders? As a result, many consumers have adopted more sustainable behaviors. .chakra .wef-facbof{display:inline;}@media screen and (min-width:56.5rem){.chakra .wef-facbof{display:block;}}You can unsubscribe at any time using the link in our emails. Sustainable materials cost more to grow and manufacture, reputable third-party certifications add further costs and using organic materials is more expensive than alternatives such as mass-produced chemicals. Our own 2019 report, " The State of Consumer Spending: Gen Z . Over 30,000 people in 60 countries were polled about their purchasing habits, and 66% of respondents said that they were willing to pay more for products and services from companies who are This conventional wisdom has been used by many brands as justification for not making their products more sustainable. The survey also showed that consumers in Southeast Asia are the most willing . 2023 Nielsen Consumer LLC. And companies with strong reputations outperform others when it comes to attracting top talent, investors, community partners, and importantly, consumers.. In 2018, that number had risen to about 85% . ", Deloitte, Share of consumers who were willing to pay more for sustainable goods in China as of November 2022, by category Statista, https://www.statista.com/statistics/1367681/china-consumers-willingness-to-pay-more-for-sustainable-goods/ (last visited March 02, 2023), Share of consumers who were willing to pay more for sustainable goods in China as of November 2022, by category [Graph], Deloitte, January 18, 2023. Businesses are in a bind. Globally, 85 percent of people indicate that they have shifted their purchase behavior towards being more sustainable in the past five years -- however, we observe meaningful generational differences in attitude. This isn't a pipe dream. According to Nielsen, 66% of all consumers are willing to pay more for sustainable brands. 69% of 18-44-year-olds would be willing to spend more on eco-friendly products, compared to 50% of those aged 45 and over. The rise of sustainable disruptors and increasing consumer awareness will all serve to drive the expectation for affordable sustainable alternatives.. In fact, the majority (73%) of global consumers say they would definitely or probably change their consumption behavior to reduce their impact on the environment. Academic research has consistently identified this gap between purchase intentions and behaviours. I dream of a world in which clothing is more expensive across the board, but there are no more sweatshops anywhere, and no more slash-and-burn. Some of the necessary transformation can be accomplished by reinventing legacy products, as Unilever has shown with its sustainable living brands, now delivering 70% of its turnover growth. Wed suggest they follow the data. Georgetown University School of Continuing Studies. Others are working for or supporting organizations dedicated to social and environmental change. So when it comes to purchasing, they are doing their homework. Here, sales of natural shower gel sales skyrocketed upward 80% during the same period. Get in touch with us now. Across industries, willingness to pay for sustainability is highest in Consumer goods (38 percent), and lowest for Energy/utilities (31 percent). COLORADO SPRINGS, US (ICIS)-Consumers are willing to pay more for sustainable products that can be recycled or reused, according to a new survey of 6,000 people worldwide by consultancy Accenture. Climate Explained is a collaboration between The Conversation, Stuff and the New Zealand Science Media Centre to answer your questions about climate change. As economists say, as price lowers, our willingness and ability to buy an item increase. A new study, looking at the sales from 2013 to 2018 of products marketed as sustainable, finds the conventional wisdom isnt true. Learn more about how Statista can support your business. While attitudes towards sustainability vary between generations, they also vary across countries -- when looking at consumers who have either made significant changes to their purchasing behavior or completely changed their way of living to be more sustainable, Austria leads the way (42 percent), followed by Italy (41 percent), Spain (35 percent) and Germany (34 percent). Attitudes towards sustainability also vary by industry when measuring its importance as a purchase criterion, from 74 percent in Energy/utilities to 44 percent in Financial services. Sustainability-marketed products are growing quickly in almost all CPG categories. Consumers could note if they were willing to pay "a little" or "a lot" for each sustainability benefit. A clear majority of Europeans (74%) say food companies need to work to reduce the emissions from . People want to feel that whatever they are buying aligns with their personal values. Nielsen's 2015 Global Corporate Sustainability Report has revealed that brands showing a commitment to sustainable practices are receiving support from consumers, who are willing to pay more for . An online survey of more than 1,000 consumers took place in July and found 68% of respondents said they were willing to pay more for sustainable products. Show few consumers who were willing to pay more for sustainable foods is growing in market! According to Nielsen, 66 % of consumers buy more environmentally-friendly products than consumers willing to pay more for sustainable products nielsen! Show that people are geared towards using sustainable products more than 90 % of the consumer.! About the environment does not readily translate into the purchase of environmentally friendly products offering sustainability a! Drivers of consumer spending: Gen Z are becoming a force to be aggressive. 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